In the last Super Bowl when the New England Patriots faced off against the Philadelphia Eagles, Americans bet a staggering $4.76 billion on the game. 97% of that figure was done so illegally. However, this will likely change by the time the next Super Bowl rolls around. In a hotly anticipated move on May 14, 2018, the US Supreme Court struck down the 25-year-old Professional and Amateur Sports Protection Act (PASPA), paving the way for states to legalize sports betting. Until that point, Nevada has been the only state with legal single-game wagering, and more limited state-run sports lotteries in Delaware, Oregon, and Montana. From investor to casual participant, betting enthusiast, or ardent protestor, you’ll want to understand the buzz.
This article will cover the foundations of sports betting, including its $150 billion market size, implementation timeline, and revenue distribution. It will also examine the implications of its legalization, including increased sports engagement and popularity, ethical concerns, fresh opportunities, and its impact on fantasy sports and eSports.
Sports Betting Overview
Sports Betting Explained
Almost all professional sports have betting activity, and the type of betting varies. Betting can extend beyond simply choosing winners and losers of a game (the “money line”). Bettors can also bet on the “point spread,” the number of points by which one team is favored over the other, or even on the “total,” when the bettor bets over or under the total amount of points scored by both teams. Even more sophisticated options for betting include parlays, bets on two or more teams or selections, and futures, a wager that will be determined in the future.
Sports betting is legal in many parts of the world, including Australia and western Europe, with the largest legal market in the U.K. However, even when it’s not legally permitted, the market has flourished — there are $1.8 trillion illegal wagers worldwide, largely in unregulated markets and on illegal betting websites. According to 2014 research, over 80% of sports bets are placed on the black market globally.
There are currently hundreds of betting sites and apps that allow bettors to wager, which has led to the emergence of blockchain as a discrete exchange of money and to improve on the current system. For example, digital currency Electroneum aims to have its token be used by online gambling services while platforms like HEROcoin want to decentralize sports betting. Since sportsbooks usually charge high fees and end up with the housing winning, new platforms like HEROcoin offer peer-to-peer betting and provide transparency in the flow of money and terms.
Legal Sports Betting Could Be a $150 Billion Business
In the US alone, illegal sports wagers are estimated to reach between $50 to $150 billion. For the sake of comparison, Nevada, the only US state that had allowed sports keepers, recorded $4.8 billion in 2017. And, consider that Britain, with a population of 65 million and a far less diverse sports market, yielded $20 billion in wagers for the 2017 fiscal year. Worldwide, the most popular sports to bet on are professional football and basketball (see below).
Interested in learning more about the implications of legal sports betting? Read more here from the Toptal Finance Blog.
Legal Sports Betting: A New Economy Built on Vice was originally published in Toptal Publications on Medium, where people are continuing the conversation by highlighting and responding to this story.